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Canadian Dollar Modestly Lower

By

Don Curren

Nov. 26, 2012 4:16 p.m. ET

TORONTO—The Canadian dollar is ending modestly lower Monday after suffering a bout of selling pressure after news that Bank of Canada Governor Mark Carney will be leaving his position to take over as the governor of the Bank of England next June.

The U.S. dollar was recently at C$0.9937, from C$0.9934 at 8:00 a.m. EST Monday and C$0.9929 late Friday, according to data provider CQG.

The sheer surprise of the news, which came after Carney denied that he would make the move, triggered some immediate selling of the currency Monday morning.

"I think it was a quite a surprise for everybody, including Canadians," said Sebastien Galy, senior currency stratgeist at
Societe Generale
in New York.

"It's a loss for Canada, and people probably reacted slightly negatively, initially," he said.

The Canadian dollar recovered on buying from investors who expect the move to have little short-term impact on monetary policy in Canada, he said. "They basically saw that as an opportunity to buy back into CAD," Mr. Galy said.

Some analysts suggested the Canadian currency may have weakened because Mr. Carney is seen as more hawkish than the other members of the Bank's governing council, but Mr. Galy said the prospect of any policy shift at the bank remains a fairly long way in the future.

"The underlying risks within Canada and in its exposure to the U.S. are very well known," he said.

Canadian Dollar Modestly Lower

TORONTO—The Canadian dollar is ending modestly lower Monday after suffering a bout of selling pressure after news that Bank of Canada Governor Mark Carney will be leaving his position to take over as the governor of the Bank of England next June.